London Irish boss expects salary cap increase to be swallowed up by inflationary pay rises

Brian Smith has warned the extra £500,000 that Aviva Premiership clubs will be allowed to spend on wages next season is unlikely to lead to a huge influx in players.

London Irish's director of rugby was speaking after the league announced that the salary cap is to be increased to £5million.

That will include a maximum £240,000 in academy credits, but exclude one marquee player per squad.

Smith, though, said: "If you have 30 or 40 guys in a squad who all want a £5,000 or £10,000 rise, you might have to pay that for them to stay. That chews up most of that new resource pretty quickly.

"All teams are competitive and wage inflation creeps up because if people want to take your players they will offer them more.

"There is an upward spiral. I have never seen salaries go backwards in rugby because teams get more and more competitive.

"I don't think (the extra £500,000) is an increase. It is really accepting that for the last couple of seasons there has been an inflationary effect.

"You are also competing with France, who throw big money around.

"It is a very competitive industry. Players are your key resource and you are chasing good players.

"Their values go up and this reflects that."

Clubs are set to benefit from a huge cash injection after BT agreed to pay £152million to screen Premiership games for the next four seasons.

And Smith said: "There is more money through the BT deal and it just makes sense.

"But I don't think clubs will be running out buying extra players with that extra £500,000. I think it will help them retain players."

After losing many of his top players last season, Smith has been busy arranging new deals for players whose contracts were due to expire in the summer – David Paice, Topsy Ojo, Halani Aulika, Shane Geraghty, Darren Allinson and Tom Fowlie.

The majority of those players have been given three-year contracts.

Smith said: "I am a big fan of three-year deals. Essentially in year one you think you are probably paying too much, in year two you are paying the market value and in year three you are getting good value."